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Illinois lawmakers debate regulation of car insurance rates

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(The Center Square) – Illinois legislators are debating a proposal that would give state government more power over car insurance companies.

State Rep. Will Guzzardi, D-Chicago, introduced House Bill 4767, which would force insurance companies to apply for state approval to change rates. According to Illinois Secretary of State Alexei Giannoulias, the measure would give the Department of Insurance broad authority to regulate rate hikes.

“The department could reject or modify excessive rate hikes and end the use of non-driving factors to set rates,” Giannoulias said.

State Rep. Jeff Keicher, R-Sycamore, said this idea failed in the state of Washington.

“Sixty-one percent of the auto insurance customers in Washington state saw a rate increase directly attributable to no longer able to use credit,” Keicher said.

Keicher said companies consider credit, but not income or race when setting rates.

Guzzardi said factors like credit score and zip code account for decades of discrimination.

There are reasons why car insurance is more expensive in Chicago, Keicher said.

“All you need to do is drive down a rural, then suburban, then Chicago street and take a look at the traffic. Look at how many cars are bumper-to-bumper, bumping into each other on the roads,” Keicher said.

Keicher added that insurance companies do not consider race, national origin or religion.

“It doesn’t matter. What matters is how you drive, your experience, your propensity to have another accident,” Keicher said.

Guzzardi admitted that he’s not sure how much progress his legislation would make this year. He acknowledged both Allstate and State Farm insurance companies are based in Illinois.

The American Property Casualty Insurance Association, Independent Insurance Agents of Illinois, Illinois Chamber of Commerce and Chicagoland Chamber of Commerce are listed as opponents to HB4767.

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